Toro 2013 Annual Report Download - page 33

sales in fiscal 2013 compared to 30.3 percent in fiscal 2012 and
Summary of Fiscal 2013 Results
32.3 percent in fiscal 2011.
In fiscal 2013, we achieved record net sales and crossed over the
•
In late fiscal 2013, we completed the acquisition of a micro-
$2 billion milestone for the first time in our history. Net earnings
irrigation company located in China.
increased at a double digit growth rate of 19.5 percent to
•
Fiscal 2013 net earnings of $154.8 million rose 19.5 percent
$154.8 million compared to fiscal 2012. Our fiscal 2013 results
compared to fiscal 2012, and diluted net earnings per share
included the following items of significance:
increased 22.4 percent in fiscal 2013 to $2.62 compared to
•
Net sales for fiscal 2013 increased by 4.2 percent compared to
$2.14 in fiscal 2012.
fiscal 2012 to a record of $2,041.4 million. This increase was
•
Gross margin was 35.5 percent in fiscal 2013, an increase of
primarily attributable to increased demand for our products
110 basis points from 34.4 percent in fiscal 2012. This improve-
resulting from the successful introduction of new and enhanced
ment was the result of price increases on some of our products,
products that were well received by customers, particularly for
cost reduction efforts, favorable product mix, and lower commod-
landscape contractor equipment products, continued market
ity prices. However, unfavorable foreign currency exchange rate
growth and demand for our micro-irrigation products, increased
movements and unabsorbed manufacturing costs hampered our
sales in the rental and construction market, and incremental
gross margin growth rate in fiscal 2013.
sales from acquisitions of $6.4 million. However, lower sales of
•
Selling, general, and administrative (‘‘SG&A’’) expense was up
residential products, mainly from poor weather conditions that
5.7 percent in fiscal 2013 compared to fiscal 2012. SG&A
negatively impacted sales of snow thrower and walk power
expense as a percentage of net sales in fiscal 2013 also
mower products, hampered our overall net sales growth.
increased to 24.2 percent compared to 23.9 percent in fiscal
•
Professional segment net sales, which represented 70 percent of
2012. These increases reflect higher spending for marketing and
our total consolidated net sales in fiscal 2013, grew 7.2 percent
warehousing, increased incentive compensation expense, invest-
in fiscal 2013 compared to fiscal 2012. Shipments increased due
ments in new product development, and incremental costs from
to strong demand for our landscape contractor equipment prod-
acquisitions of $4 million, somewhat offset by lower warranty
ucts due mainly to the successful introduction of new products,
expense.
higher global sales of our micro-irrigation products from contin-
•
Receivables increased by 6.6 percent as of the end of fiscal
ued market growth and demand for our drip irrigation solutions
2013 compared to the end of fiscal 2012 as a result of higher
for agricultural markets, and golf renovation projects that drove
sales volumes. Our average inventory levels were up by
higher sales of our golf irrigation systems. Additionally, price
14.3 percent during fiscal 2013 compared to fiscal 2012 as we
increases introduced on some products, increased sales and
built inventory in anticipation of strong demand for products
demand in the rental and construction market, and incremental
impacted by Tier 4 diesel engine emission requirements, as well
sales of $6.4 million from acquisitions contributed to our profes-
as higher inventory levels from the rollout of product offerings as
sional segment net sales increase in fiscal 2013 compared to
a result of the growth of our rental and construction business.
fiscal 2012.
Average net working capital (accounts receivable plus inventory
•
Our residential segment net sales were down by 2.1 percent in
less trade payables) as a percent of net sales was 16.6 percent
fiscal 2013 compared to fiscal 2012 due primarily to lower ship-
as of the end of fiscal 2013 compared to 15.2 percent as of the
ments and demand for snow thrower products as a result of the
end of fiscal 2012. Our domestic field inventory levels were up
lack of snowfall during the past two winter seasons in key mar-
as of the end of fiscal 2013 compared to the end of fiscal 2012
kets. Additionally, adverse spring weather conditions negatively
due, in part, to anticipated strong retail demand in fiscal 2014 for
impacted our net sales and demand for walk power mowers dur-
our professional segment products subject to Tier 4 diesel
ing the key selling period. However, sales of Pope irrigation
engine emission requirements, as well as the expansion of our
products in Australia, zero-turn radius riding mowers, and
rental and construction business from recent acquisitions.
handheld trimmer and blower products were up due to positive
•
We continued our history of paying quarterly cash dividends in
customer response to newly introduced and enhanced products,
fiscal 2013. We increased our fiscal 2013 quarterly cash divi-
as well as favorable weather conditions.
dend by 27.3 percent to $0.14 per share compared to our quar-
•
International net sales for fiscal 2013 were up 3.5 percent com-
terly cash dividend in fiscal 2012 of $0.11 per share.
pared to fiscal 2012 due mainly to increased demand in Europe,
•
Our stock repurchase program returned nearly $100 million in
Middle East, and Africa (‘‘EMEA’’) and Asia for our micro-irriga-
cash to our shareholders during fiscal 2013, which reduced our
tion and golf equipment products. However, changes in foreign
number of shares outstanding. This reduction resulted in a bene-
currency exchange rates resulted in a reduction of our total net
fit to our diluted net earnings per share of approximately $0.07
sales of approximately $13 million in fiscal 2013. International
per share in fiscal 2013 compared to fiscal 2012.
net sales comprised 30.1 percent of our total consolidated net
27